NEW YORK Vallourec SA
remains positive about the oil and gas markets globally, but
especially in the United States, in 2013.
"Drilling activity in the U.S.
is expected to progressively pick up from current levels, while
indicators for the global oil and gas markets are positive,"
Philippe Crouzet, chairman of the Boulogne-Billancourt,
France-based steel tube and pipe makers management board,
said in a statement released with 2012 earnings.
However, drill rig activity this
year is expected to remain below the average level seen in
2012, the company said.
Oil country tubular goods (OCTG)
prices have recently trended downward "in line with the market"
amm.com, Feb. 20), although orders remain good,
the company said.
A strong performance by the oil
and gas sector in 2012 was offset by "a challenging environment
marked by economic uncertainty, lower demand and increased
competition" in the companys other end markets, according
to Crouzet, leading to a 46-percent drop in Vallourecs
net income to 217 million ($288.36 million) from
402 million in 2011 despite a 1-percent increase in sales
to 5.33 billion ($7.08 billion).
In the United States, the
company benefited from a higher average drill rig count during
2012, as well as longer laterals of horizontal wells and more
wells per drill rig, leading to a 14-percent increase in sales
for that segment to 3.23 billion ($4.29 billion).
However, its non-energy
segmentwhich includes mechanical, automotive and
constructionsaw a 21-percent decline in sales to
1.09 billion ($1.45 billion) due to lower industrial
production in Europe and a slowdown in China, according to the
Volumes shipped in 2012 fell 7.1
percent to 2.1 million tonnes "primarily due to lower volumes
North America was
Vallourecs largest market last year, with sales of
1.53 billion ($2.03 billion), 12 percent higher than in
For the fourth quarter, the
company recorded net income of 70 million ($93 million),
down 40 percent from 117 million in the same period a
year earlier on sales that fell 6 percent to 1.47 billion
Vallourec made the first
deliveries of pipe from its new mill in Youngstown, Ohio, at
the end of 2012. Finishing lines at the plant are expected to
be commissioned in the second quarter, the company said.